With the death of Rodney Hilton, at the age of 85, we have lost one of the most outstanding medieval historians of the 20th century, and a leading figure in Marxist history. His great achievement was to reveal new dimensions of the lives of medieval peasants and townspeople, and to outline the dynamic forces behind economic and social change.

He was born in Middleton, Lancashire, and brought up in a family with Unitarian and Independent Labour party traditions. He went to Manchester grammar school, and then to Balliol college, Oxford. He encountered at Balliol such medievalists as VH Galbraith and Richard Southern, and the Marxist historian of the 17th century, Christopher Hill.

Hilton practised leftwing politics in the Labour club and the Communist party, in the company of such activists as Denis Healey. In the turbulent late 1930s he still found time to work hard on his thesis, which he completed well within the three years now regarded as virtuous. He applied a Marxist analysis to the rural economy of Leicestershire between the 13th and 15th centuries, focusing on the emergence of agrarian capitalism. He left the Communist party in 1956, but then supported the New Left, and remained a steadfast advocate of the British Marxist tradition throughout his life.

He was reluctant later in life to say a great deal about his four years in the army during the second world war, but his experiences had a profound effect. In active service in North Africa, Syria, Palestine and Italy he saw terrible things, but there were lighter moments, such as inventing a cocktail by mixing gin and Owbridge's Lung Tonic in some remote middle eastern officers' mess. His politics gave him contacts with local people which were denied to most officers. As an historian, he was able to observe peasants at first hand, and he kept up an interest in the medieval near east after the war.

At the end of his military service in 1946, he was appointed to a lectureship at Birmingham university, after a no-doubt searching interview in the bar of the Mitre Hotel, Oxford, and he remained at Birmingham until his retirement in 1982. He was appointed to a personal chair in medieval social history there in 1963, and served for some years as head of the school of history in the late 1960s, a post which he gratefully relinquished to concentrate on research.

He took medieval peasants seriously, as people with ideas, who were able to organise themselves in purposeful actions. His writing about the peasant revolts at the beginning of his career included a book on The Revolt Of 1381 (with H Fagan, 1950). In 1973, Bondmen Made Free marked a return to these themes; it was a deservedly influential book which surveyed peasant unrest over many centuries and countries, and focused on the 1381 rising. Hilton saw in that rebellion, led by John Ball and Wat Tyler, a coherent programme and lasting effects, both of which were denied by historians who were less sympathetic towards the rebels. Hilton had been encouraged to revive his interest in revolts by the student rebellions of the 1960s, including the Birmingham "sit-in" of 1968.

In the 1970s he was enthused by developments in the social sciences, returning always to the founders of social science, Marx and Weber. This bore fruit in The English Peasantry In The Later Middle Ages (1975), the book of the Ford lectures which he delivered at Oxford in 1973. It contains the most satisfying discussion of the term "peasant" found in any recent historical writing.

Hilton's work kept up with new trends: he wrote about women in the 1970s, for example, and explored literature, such as the ballads of Robin Hood, as an insight into popular mentalities. He played an important role in developing the history of towns, which had been neglected in the general enthusiasm for peasants and agrarian studies in the previous decades. Just before he retired in 1982, and in the next few years, he published a series of innovative studies of medieval towns, placing them firmly in the framework of feudal society, not as the beginnings of modernity.

Hilton's work was deeply rooted in impeccably researched details from the archives, especially in the west midlands. His third book was an exploration of the west midlands region, circa 1300, in the manner of the regional studies then popular in France.

The development of archaeology as a source of historical information was helped by his organisation of an excavation of a deserted medieval village, with Philip Rahtz as the director. Hilton then boldly persuaded the university to appoint a lecturer in medieval archaeology in the school of history.

Telling examples and colourful episodes from the archives are found throughout his work, like the disorderly conduct of the turbulent and quarrelsome people of the small town of Halesowen in Worcestershire, whose behaviour demonstrated the social disruption caused by the growth of a new town.

He encouraged students to "do research", and the result was a steady stream of postgraduates who went on to produce work under his influence, and who are sometimes called "the Birmingham school". A typical example of the intellectual and social style that he encouraged was the "Friday night seminar", organised by postgraduates, in which a group met in a house or flat, each armed with a bottle of wine. Visitors wondered at the quality of discussion as the drink flowed.

Hilton's influence helped to change historical thinking in the second half of the 20th century. As a leading figure in the Communist party's historians' group his contribution might seem to have been confined to a small circle, yet one of the fruits of those discussions, a collective study of The Transition From Feudalism To Capitalism was eventually published in book form in 1976, when Marxist history was no longer regarded with such hostility. Out of the historians' group came the journal Past And Present, which sought to build bridges between Marxist historians and open-minded non-Marxists. After shaky beginnings in the 1950s, the journal grew into the leading historical forum for airing new ideas.

He spread his message about the importance of ideas in historical discourse throughout the world, partly through Past And Present, and partly through his wide range of international contacts. He gave lectures and attended conferences abroad, attracted research students from Israel and Argentina, was translated into many languages, and welcomed scholars from eastern and western Europe and the third world into his home. In the 1970s and 1980s he achieved the difficult feat of being admired by radical youth, while winning the acceptance of the establishment as a fellow of the British Academy (elected in 1977).

Those who spent time with Rodney Hilton appreciated his informal, irreverent and boisterous style. He gave his opinions robustly, and no one could get away in discussion with platitudes or a weakly supported generalisation. Any criticism, however, was usually delivered with good humour. He discussed theory and general ideas, but in unpretentious language, without jargon, and with such good sense that even hostile listeners found it hard to argue back. His conversations, though directed towards serious purposes, usually took place in bars or in the presence of uncorked bottles, and there was much profanity and outbursts of laughter.

He was married first to Margaret, with whom he had a son, Tim, a former art critic of the Guardian. By his second wife, Gwyn, he had two children, Owen and Ceinwen. His third wife, Jean Birrell, who also writes on medieval social and economic history, supported him through his most productive years and looked after him to the end.

· Rodney Howard Hilton, historian, born November 17 1916; died June 7 2002